Just wanted to post here so I can be kept up to date - I'm assuming a note will be added to the thread when a permanent fix is available.

We have the very same issue on our SQL 2000/Windows 2003 machine. Once the backup file to be compressed gets over a certain size, the backup fails. In our setup we are using HyperBac to compress the Differential backups, when the DIFF was 6GB it was fine, when it was around 15GB or so the backup failed (using zip compression for portability).

Incidentally we were using the HyperBac on our SQL 2005/Windows 2003 server with similar backup sizes and zip compression, and all was well.